By Doron (Bud) Antrim
Officers of Insurance Management Company (IMC) of Erie, Pennsylvania (left to right) are Beth Dubik, John Bloomstine and Chris Bloomstine. The firm received the Commonwealth of Pennsylvania's Keystone Quality Award.
What is your agency's most valuable resource? Its book of business and clients? A top producer or two? Its relationships with its markets? You?
The leaders of three exceptional agencies respond in one voice when asked that question. They have no doubt that their agency's most valuable resource is its people, its staff members. The reason is simple: It takes a peak performing staff for an agency to achieve peak performance.
The leaders and staffs at Chandler-Frates & Reitz (CFR) of Tulsa, Oklahoma; The Flanders Group of Pittsford, New York; and Insurance Management Company (IMC) of Erie, Pennsylvania, have created agencies that are recognized throughout the industry for their excellence. CFR and The Flanders Group were selected by Rough Notes readers as the magazine's Marketing Agency of the Year in 1994 and 1996, respectively. IMC was distinguished in 1994, when it earned the Commonwealth of Pennsylvania's Keystone Quality Award in a statewide competition that included corporations of all types and sizes.
But what distinguishes these leaders and their teams, in addition to their agency's success, is their ability to create a culture in which staff members perform at their best level.
To perform their best, people need a focus for their energy and activities. They need to focus on achieving something that transcends the daily routine, something that provides a higher purpose than just showing up every day and performing their tasks. Members of a successful sports team, for example, know that their higher purpose is to win, and they focus their energies on achieving that goal. Everyone in the three agencies also is focused, just like athletes on a winning sports team.
At CFR, the focus is on net revenue growth, i.e., sales and client retention. "We go to great lengths to let all our people share in the success and euphoria of a new sale," explains Robert Gardner, president and COO. Each sale is announced throughout the office by the ringing of a large bell. This is a call for everyone to collect around the bell, hear the producer tell the story, and celebrate the good news together. CSRs who work with the producer are handed a cash bonus. "It provides a sense of excitement and a moment for everyone to remember why they're here," Gardner adds.
The bell and celebration is just one approach that the leaders at CFR use to maintain a strong focus on sales and retention. Changes in actual net revenues are posted throughout the agency each week, by department and by the agency as a whole. Then, monthly totals are compiled and announced during an all-staff meeting that is eagerly anticipated by everyone, for an obvious reason. If the agency's year-to-date net revenues exceed the previous year's, everyone receives a bonus on the spot. The bonus, which is proportional to the amount that current year-to-date results exceed the previous year's, is paid in cash; and a like amount is credited to the staff member's 401(k) account. Additional cash bonuses are paid to everyone in the agency for each department that generated more net revenues for the month than were achieved in the same month of the previous year.
Is this intense focus on sales and retention paying off for CFR? You be the judge: Their commission income has grown an average of 20% per year for the past five years. Clearly, many factors contribute to this growth. But Robert Gardner believes the agency's performance-focused culture may head the list. "Two factors that cause people to get excited," he says, "are:1) Is there something at the end of the rainbow? and 2) Where am I on the rainbow?"
This focusing of the entire agency is also a hallmark of the culture at IMC and The Flanders Group. At IMC, the focus is on teamwork, client service, and continuous quality improvement. Their book of business is almost exclusively mid-sized commercial accounts, and the IMC team is dedicated to providing a level of service that cannot be matched by the brokers and large agents that aggressively pursue their clients. They are succeeding. Retention averages 94%, which includes accounts lost due to corporate takeovers.
How does IMC maintain this focus? With a daily meeting. All 26 staff members meet at 8:15 a.m. for 30 to 45 minutes (part-timers answer the telephones and can pull someone out of the meeting if justified). Initially, the meeting concentrates on client service issues--on experiences with clients and new insights into their needs; on strategies for meeting the needs; and on how staff members can best support each other as they implement their strategies. When they are confident that client service issues are well in hand for the day, team members turn their attention to continuous improvement of operations and quality. New suggestions are raised and evaluated. Improvement projects may be defined and assigned on the spot. Then, the projects currently under way are discussed and progress is evaluated.
The theme throughout these meetings is, "How can we create greater client satisfaction while we also raise the efficiency and effectiveness with which we work?" That theme is central to the culture at IMC. It focuses everyone's activities. And it is providing John Bloomstine, president, and his team at IMC with a competitive advantage.
Working smart--working efficiently and effectively--is a commitment made by staff members in each of the three agencies. So is working hard. And these commitments at The Flanders Group contribute substantially to their revenue per employee which now exceeds $200,000. "We don't settle for mediocre, and we don't settle for very good," explains Valarie Webster, director of client services. "We want to be outstanding in everything we do, and everyone in the agency understands and lives up to that." People are told before they join The Flanders Group that the organization is very lean, and that everyone is expected to work above and beyond what is normally accepted in other agencies. "But they also understand," Valarie adds, "that they will be compensated above and beyond what is normally provided."
The best performers welcome high expectations. As Sherry Burks, vice president for agency operations at CFR, explains, "The force that drives our people to perform is not just the money, it is also the will to do an exceptional job and to know that they are on a team with exceptional people." But the high standards must be defined and communicated. And staff members must receive periodic feedback on how they are doing.
When Chris McVicker, president of The Flanders Group (foreground in hat), learned that his agency had been named the Marketing Agency of the Year for 1996, he chartered an airplane so that all agency employees could attend the award dinner. Since the agency's credo is "We run hard for our clients," they dressed in tennis shoes (and tuxedos).
At The Flanders Group, the standards are set and maintained by the performance review process. It is a tool that both leaders and staff use to manage performance throughout the agency. Clear expectations for everyone's behavior have been carefully defined as critical success factors. Webster describes these factors as, "Non-optional behaviors; they comprise a code of conduct that guides everyone." The process also includes setting and monitoring individual goals for productivity as well as for learning and skill development. In total, this process provides the standards, the feedback, and the support people need to excel in their jobs.
With staffs that are focused on achieving results and high standards for performance, what can be said about these agencies as places to work? Is the culture too demanding, too oppressive, too much like a sweatshop? Sherry Burks provided a clue to the answer when she said, "I don't have to go out and beat the bushes to find qualified people. We have a reputation in the Tulsa area and people call us. They want to come and work here."
Each of these agencies is an "employer of choice" in its city--a magnet for the best talent--because of culture. Each also reaps the rewards of a stable staff, since turnover is practically nonexistent.
What balances the hard work and results-focus in these agencies to make them such attractive places to work? The answer lies in each agency's quality of work life, in all the positive rewards and feelings the employees derive from their jobs. In short, top dollars are not the only rewards they receive.
Jack Allen, Jr., is chairman of Chandler-Frates & Reitz (CFR) of Tulsa, Oklahoma, the Rough Notes Marketing Agency of the Year for 1994. The agency's payment of bonuses to employees is linked to achievement of department goals and overall agency goals.
First, staff members are rewarded by being treated as valuable partners in the enterprise. They are encouraged to contribute beyond their specific jobs, and to help with such issues as how to offer new and improved services to clients, or how to simplify and speed up work processing, how to improve client marketing, how to cut costs.
Benefits to the agency include better decisions, more improvements, and easier implementation of change. As John Bloomstine attests, "We (the IMC associates) raise all sorts of questions at our morning meetings because we want to take advantage of having a great bunch of minds available all at one time."
Also contributing to the high quality of working life at these agencies is the appreciation everyone receives. Leaders celebrate the staffs and the staff members celebrate each other, in many ways. When The Flanders Group was named Rough Notes 1996 Marketing Agency of the Year, for example, President Chris McVicker made sure that all employees knew they were appreciated. He chartered a plane and invited all 20 staff members to fly to Indianapolis, with a guest, to celebrate their accomplishment and themselves at the award dinner.
But leaders of the three agencies also stress the importance of continually providing recognition and appreciation in little ways. As Robert Gardner says, "Every little act of caring has a cumulative effect on people." At CFR, Chairman Jack Allen, Jr. demonstrates his caring by starting every morning with a walk around the office just to say, "Good morning" to everyone. The little acts of caring continue at CFR when staff members receive a card and gift certificate on their anniversary, a card and flowers on their birthday, or a mention of a noteworthy personal event in the agency's Monday morning memos. Because of these practices, and many others, there is little doubt that people feel recognized and appreciated at CFR.
They also have fun at these agencies; it is not all work and no play. While the staff is highly professional and takes business very seriously, they know the value of lightening up, and occasionally taking themselves less seriously. "We have an environment at CFR," Sherry Burks explains, "in which our people are dedicated to working very hard but to having fun doing it. We celebrate the fact that we work so hard, and most of our people are smiling most of the time."
Fun. Recognition and appreciation. A sense of mission and meaning, of being a contributing member of a accomplishment-focused team. Rewards that are linked to accomplishments. Pride in meeting high personal standards. Pride in belonging to a superior team. These are what raise the performance of knowledgeable workers to peak levels. The leaders at CFR, IMC, and The Flanders Group know this. They also know that a peak performing staff is essential to their agency's peak performance. And there is an increasing consensus from enlightened leaders both inside and outside our industry that when an organization's culture brings out the best in its people, the organization will enjoy a sustainable competitive advantage. *
The author
Doron (Bud) Antrim is managing partner of Woodgate Partners, LLC, and is dedicated to helping agency leaders and their staffs build a culture that sustains peak performance. He has pursued this objective exclusively in the insurance industry for the past 16 years and wrote the IIAA's handbook in leadership best practices, "The Five Practices of Highly Effective Leaders." His past affiliations have included The Hartford Group, Alexander & Alexander, and the global management consulting firm Booz, Allen & Hamilton. With Woodgate Partners, he is focusing on providing tools and support that produce results for agents without high consulting fees.
©COPYRIGHT: The Rough Notes Magazine, 1998